BMI View: Following the upside growth surprises from the Philippines, Vietnam, Malaysia, and Singapore in Q217, w e maintain our broadly positive outlook on ASEAN over the coming years as it is likely to benefit from increased investment and strengthening trade. While Chinese growth also surprised on the upside, the unwinding of aggressive monetary and fiscal policies in China will likely weigh on economic activity, and will also negatively impact Hong Kong due to their tight linkages. Lastly, India will likely recover from the pre-GST slump as the streamlined tax systemwillbe positive for the business environment.

Among the major Asian economies that released Q217 real GDP figures and also provided Bloomberg consensus estimates, six out of 12 surprised to the upside, with four of them coming from ASEAN, and we remain broadly positive on the outlook for Southeast Asian economies. China was also an outperformer, alongside Hong Kong, which has close linkages to the mainland economy. While we still expect Chinese growth to moderate over the coming quarters due to waning fiscal support, tightening credit conditions, and a cooling housing market, negative tail risks are greatly reduced. In terms of negative surprises, the Indian economy performed the worst, growing by 5.7% y-o-y in Q1FY2017/18 (versus the surveyed figure of 6.5% y-o-y) due to de-stocking prior to the implementation of the goods and services tax (GST) system in July, but we expect a recovery over the second half of FY2017/18 (April - March).

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